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June 21, 2012

Yahoo, Facebook In Settlement Talks Over Patent Infringement Lawsuit

by editor

Yahoo and Facebook are in settlement discussions over a high-profile patent-infringement lawsuit filed by Yahoo in March against the social networking site, according to court documents.

“The parties are currently engaged in settlement negotiations to resolve this dispute. The parties believe that a further extension will facilitate settlement,” said Yahoo attorney Kevin Smith in an amendment filed Tuesday in U.S. District Court for the Northern District of California.

“Yahoo and Facebook are in agreement that additional time is warranted for the parties to prepare their submissions, will not adversely affect the case schedule, and will facilitate a settlement.”

Sunnyvale, Calif.-based Yahoo sued Facebook earlier this year, claiming the social network had infringed ten of its patents related to online ads and social networking inventions.

In its lawsuit, Yahoo said Facebook was considered "one of the worst performing sites for advertising" prior to adapting Yahoo's ideas.

The controversial suit was unusual for Yahoo, which has typically used its patent portfolio to defend itself from litigation rather than pursue it with competitors.

The suit also coincides with Yahoo´s efforts to generate new sources of revenue under former CEO Scott Thompson, who had assumed his post in January but was ousted last month after it was discovered he had falsified his academic credentials.

Silicon Valley tech firms have long complained about frivolous patent litigation. However, Yahoo claims its suit is required to rightfully protect its inventions.

Menlo Park, Calif.-based Facebook expressed surprise with the litigation due to its long-standing partnership with Yahoo. The social network later countersued, alleging that Yahoo had infringed its patents. In the suit, Facebook called Yahoo shortsighted for its decision to prioritize "litigation over innovation."

The two companies have since been engaged in considerable legal squabbling.

In the court filing on Tuesday, Yahoo's attorneys asked a San Francisco federal judge to extend a series of deadlines in the case for two weeks to "facilitate settlement.”

Facebook did not oppose the request, Smith wrote.

U.S. District Judge Jeffrey White approved the delay request on Wednesday.

The case in U.S. District Court, Northern District of California is Yahoo Inc. v. Facebook Inc., 12-cv-1212.